July 17 (Bloomberg) -- UnitedHealth Group Inc., the biggest
U.S. health insurer by sales, beat analyst earnings estimates as
revenue grew from its technology and consulting unit that helped
fix the Obamacare insurance website.

Net income was $1.41 billion, or $1.42 a share, down from
$1.44 billion, or $1.40 a share, a year earlier, the Minnetonka,
Minnesota-based company said today in a statement. Earnings per
share beat by 16 cents the $1.26 per share average estimate of
22 analysts combined by Bloomberg.

Revenue rose 7 percent to $32.6 billion, led by an increase
in customers in Medicaid, the administrator of U.S. health
benefits for the poor, and a 28 percent boost in sales for the
company’s technology, consulting and prescription drugs unit,
known as Optum. UnitedHealth is the first of the large health
insurers to report second-quarter results.

“I think generally the results will be viewed positively
for the group,” said Brian Wright, an analyst with Sterne Agee
& Leach Inc.

UnitedHealth shares rose 1.6 percent to $85.11 at 4 p.m. in
New York trading, the highest since at least 1985. It has gained
29 percent over the past 12 months. WellPoint Inc., the second
largest health insurer, rose 1.1 percent to $113.44, a record
high. Aetna Inc. also reached a record, rising 1.9 percent to
$83.74.

Sales for Optum grew $2.6 billion. The business manages
drug benefits and works with hospitals, employers and
governments to lower health costs. It’s also been credited with
helping to fix the U.S. website for people to enroll in
insurance under the Patient Protection and Affordable Care Act,
or Obamacare. It has since been hired by several states to aid
their online enrollment.

Obamacare Effect

UnitedHealth said that Obamacare’s requirements and fees
cut profit by about 0.9 percentage points. The law also grew the
company’s business in Medicaid, which was expanded under
Obamacare. This year, the insurer added 650,000 people through
the program, Stephen Hemsley, UnitedHealth’s chief executive
office, said on a call with analysts today.

“We see the next 18 months as important, given that by
January, 2016, the ACA will largely be in place and we will be
entering an election cycle that will set the stage for shaping
the next phases of health reform,” he said. “In the individual
market, we plan to grow next year, as we expand our offerings to
as many as two dozen state exchanges.”

The company reported lower expenses than analysts were
expecting, helping them beat earnings expectations, said Wright.

“Given the challenging first quarter, they were probably
very focused on managing their operating-expense line,” he
said. “It was an underwhelming first quarter and a much better
second quarter.”

Forecast Raised

The company raised the bottom end of its full-year earnings
forecast, saying it expects profits per share of $5.50 to $5.60
a share in 2014, up from $5.40 to $5.60 per share. The company
expects revenue this year of $130 billion, an increase of as
much as $20 billion from its previous estimate.

“Our focus on executing on fundamental details, delivering
innovative and responsive services that consumers value and
building deeper relationships is creating stronger momentum and
improving our outlook,” said Stephen J. Hemsley, UnitedHealth’s
president and chief executive officer in the statement.

The company added 270,000 customers in the quarter with
most coming from government and senior insurance plans and its
expansion outside the U.S.

Revenue from its Medicare and retirement plans grew 7
percent to $11.8 billion. The company saw a decrease in revenue
from its U.S. commercial division, which provides coverage to
individuals and employers.